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[Backdoor] tIRA -> rollover to Roth IRA, but after profit - where to mention in TT?

[Used Fidelity for these transactions]

Q: Where/How Turbotax can/will show - to charge tax on profit ($558.67)
Context:

I added $6000 to IRA(first time ever) in 2020. And I did this rollover/conversion to roth IRA in Nov 2022.

I added $6000 to IRA in 2022, and did rollover (in a week) to Roth IRA

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Now I have these forms in my account:
A) 1099-R (tIRA) showing (with these fields having values)
1 Gross distribution: 12,558.67
2a Taxable amount: 12,558.67

7 Distribution code(s): 2

IRA/ SEP/ SIMPLE: X

B) 5498 (2022 IRA Contribution Information)
IRA contributions (other than amounts in boxes 2-4, 8-10, 13a and 14a): $6000


C) 5498 (2020 IRA Contribution Information) [this is from my fidelity tax history 2020]
IRA contributions (other than amounts in boxes 2-4, 8-10, 13a and 14a): $6000

Note: no other transactions done in IRA or Roth IRA till date

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1 Reply
DanaB27
Expert Alumni

[Backdoor] tIRA -> rollover to Roth IRA, but after profit - where to mention in TT?

Please follow the steps below and you will see the earnings taxable on line 4b of Form 1040.

 

To enter the nondeductible contribution to the traditional IRA:

 

  1. Login to your TurboTax Account 
  2. Click on "Search" on the top right and type “IRA contributions” 
  3. Click on “Jump to IRA contributions"
  4. Select “traditional IRA
  5. Answer “No” to “Is This a Repayment of a Retirement Distribution?
  6. Enter the amount you contributed of $6,000
  7. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
  8. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had a nondeductible contribution before this tax year.
  9. Enter your basis in the Traditional IRA from your 2020 Form 8606 line 14 ($6,000)
  10. On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (if you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible).

 

To enter the 1099-R conversion: 

 

  1. Click on "Search" on the top right and type “1099-R”  
  2. Click on “Jump to 1099-R”
  3. Click "Continue" and enter the information from your 1099-R
  4. Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA
  5. On the "Review your 1099-R info" screen click "Continue"
  6. Answer "yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
  7. Answer the questions about the basis from line 14 of your 2020 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

 

TurboTax will automatically calculate the taxable part of $558.67 after following all the steps (assuming your value at end of 2022 was $0) and transfer it to line 4b of Form 1040.

 

To preview Form 1040:

 

  1. Click on "Tax Tools" in the left menu
  2. Click "Tools"
  3. Click "View Tax Summary" in the Tool Center window
  4. Click on "Preview my 1040" on the left
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